Thousands of criminals should have their jail terms cut because they are being locked up in 'dreadful conditions', one of the country's top judges has said.

Sir Igor Judge, Head of Criminal Justice, said that judges should reduce the 'punitive' element of a sentence if prisoners faced overcrowded jails.

Any prisoner forced to share a one-man cell with another prisoner, or who does not have access to exercise facilities should have their sentence cut to reflect that, he said.

The news comes as the Government announced emergency plans to cut overcrowding with offenders sentenced to six months or less in prison only serving time behind bars if a cell space was available.

The prison population is hovering close to capacity and hundreds of convicted criminals are having to be housed in overflow police station or court cells at huge cost.

Sir Igor said at a meeting of the Prisoners' Education Trust: "I have believed for some time that you have to take into account, in the punitive element of the sentence, that in conditions that are wildly overcrowded, you may be serving your sentence in dreadful conditions, locked up with one or two other people, or forced into a situation where there is no exercise."

The move would not mean dangerous or violent criminals being let out while posing a risk to the public.

Under the proposals, criminals who have their punitive sentences cut could still be kept behind bars at the end of their term if they are still considered a danger.

The Government has announced proposals to scrap custodial sentences altogether if an offender is handed a term of six months or under.

The plan would mean thousands of offenders being let off with community sentences instead of custody.

Critics again reacted with astonishment, claiming the move would amount to a 'sentencing lottery' with punishments handed out by the courts depending not on the severity of the crime but on levels of jail overcrowding, and warning that public confidence in the criminal justice system would take a hammering.

The proposals are understood to form part of Lord Carter's long-awaited review of the troubled prison system, due to be published at the end of this month.

In a meeting with a cross-party group of MPs last week prisons minister David Hanson is said to have told members the Government was 'actively considering' the plan.

Sparing offenders who are sentenced to only a few months behind bars could effect thousands convicted of theft, burglary, assault and drug offences, and even less serious sexual offences.

The Sentencing Guidelines Council, would issue instructions to the judiciary to take into account the availability of space in jails when handing out punishments.

Prison campaigners claim short sentences served in overcrowding jails are pointless as they do nothing to tackle offending behaviour among criminals but clog up the system, preventing effective rehabilitation work for more serious offenders.

But confidence among judges and magistrates in supposedly 'tough' community sentences appears low, and scrapping short jail sentences on the grounds of overcrowding would be a massive political embarrassment.

Harry Fletcher of the probation union Napo said: 'Relating the use of custody to capacity will be highly controversial; people will see it as a sentencing lottery.'

Shadow justice spokesman Edward Garnier blamed inadequate funding for building more prison capacity in recent years, saying: 'The Government is trying to avoid the consequences of its own policies.

'This is a train crash that has been approaching for many years, but ministers have done nothing. Measures such as this will inevitably lead to a reduction in public confidence in the criminal justice system.'

He said the plans would lead to 'wild and unfair' differences in sentencing on different days, adding that if judges were told not to jail offenders because there was no room, 'we might as well do away with our courts and let the Secretary of State deal with sentencing from his office in Whitehall.'

Ministers have already expanded electronic tagging early-release schemes and introduced emergency rules allowing thousands of offenders to walk free 18 days before their sentences are completed.

Both schemes could be further expanded as a result of the Carter Review, although to date they have failed to ease the overcrowding crisis, and the courts are still sending criminals to prison faster than the Government can find ways to free them early.

There are currently 81,189 prison places in England and Wales.

On Friday that was not enough to house the 81,474 inmates being held, and 339 had to be locked up in police stations or courts under emergency powers.

Home Office projections suggest the prison population could rise to 102,000 within four years, far outstripping the planned building of new jail capacity.

Tensions between ministers and the judiciary over sentencing have grown worse in recent months, with leading lawyers accusing the Government of demanding tough action against criminals but failing to pay for the necessary jail space.

A Ministry of Justice spokesman said: 'The Government will respond to Lord Carter's review with a statement to Parliament in due course.'